Offshore Trusts Report: Bermuda

Supervisory and Licensing Regime and Fees

The Trust Companies Act 1991 and the Trusts (Regulation
of Trust Business) Act 2001 established a regulatory regime for
trust management companies in Bermuda, and many professional firms
have taken advantage of this legislation.

The 2001 Act prohibited the carrying on of trust business
in or from within Bermuda unless the trustee is licensed or exempt.
The Act replaced the Trust Companies Act 1991, and conferred new
regulatory and information gathering powers on the Bermuda Monetary
Authority.

There are over 30 licensed trust companies in Bermuda,
some of them operating as exempt companies.

Private trust companies have gained currency in recent
years.

Trust Companies (or indeed partnerships) offering
their services more widely need a license from the Finance Ministry,
which delegates the issue of licences to the Bermuda Monetary Authority.
Certain minimum requirements must be met before a license is issued:

Minimum paid-up capital of $250,000;

Adequate insurance;

Adequate premises and appropriately skilled staff.

An application includes details of beneficial ownership,
personnel, business plan etc. A licensed company is subject to reporting
and other requirements under the Bermuda Monetary Authority Act
1969. It is also subject to Codes of Conduct covering 'know your
customer' rules, defences against money laundering and other criminal
activities. The annual licensing fee payable to the BMA is dependent
on the type of licence and the number of staff employed. The annual
fee for a limited trust licence is USD1,100. The annual fee for
an unlimited trust licence starts at USD12,130 for a licensed company
which employs five people or less, up to USD36,400 where it employs
ten people or more.

There is no stamp duty on Bermudan Trusts; and there
are no income or corporation taxes in Bermuda.

The two key associations in Bermuda for trust management
companies are The Society Of Trusts and Estate Practitioners (STEP,
Bermuda Branch), and the Bermuda International Business Association
(BIBA).

Although trust management companies have always been
required to register with the Ministry of Finance, following a KPMG
review of the jurisdiction's supervisory and regulatory regime,
it was recommended that individuals who deal with trusts should
also be required to sign up, and that both groups should become
the responsibility of the financial services regulator.

As a result of the KPMG review, and in response to
pressure from the OECD and FATF, Bermuda introduced the aforementioned
Trust (Regulation of Trust Business) Act 2001 which established
minimum criteria and a statement of practice for trusts, and ensures
that trust professionals treat customers in a fair and proper fashion.

Superintendent of Banking, Trust, and Investment
at the BMA, Munro Sutherland explained at the time that: "Bermuda
was one of the first jurisdictions to regulate trusts with the Trusts
Companies Act 1991. It was pioneering stuff at the time, but it
was rather limited." The deadline for registration of individual
trust professionals with the Bermuda Monetary Authority under the
Act was in January, 2003.

A Code of Practice under the 2001 Act was passed in
2002; it provides guidance as to the duties, requirements, procedures,
standards and sound principles to be observed by persons carrying
on trust business. A revised 'Statement of Principles' under the
Act was issued in June, 2004.

OFCs Join G5 Beneficial Ownership InitiativeMonday 25/4/2016Bermuda, Gibraltar, and the Isle of Man Governments have agreed to support an initiative on the automatic exchange of beneficial ownership information, which is being spearheaded by the five largest economies in the European Union.

Strong Demand For Bermudan IBCsThursday 19/6/2014Bermuda has reported healthy growth in both offshore and local company registrations, including a 21 percent year-on-year increase in the use of international business companies.

Offshore Company Formations Have SlowedWednesday 7/8/2013The majority of offshore jurisdictions experienced a decline in company incorporation activity in the second half of 2012 compared with the first half, according to legal services consultancy the Applebly Group.

Bermuda Relaxes Beneficial Owner Reporting RulesTuesday 26/2/2013The Bermuda Monetary Authority has announced that it has increased the threshold
above which beneficial owners of stakes in companies or partnerships, or companies
that are subject to exchange control requirements, must disclose personal information
to the Authority, to 10% from 5%.

Former Banking Head To Lead Cayman FinanceFriday 8/2/2013Cayman Finance, the organization formed to represent the Cayman Island's financial services
industry, has confirmed the appointment of Gonzalo Jalles, the former head of
HSBC Cayman, as Chief Executive Officer with immediate effect.

Bermuda Outlines 2013 Regulatory PrioritiesWednesday 6/2/2013The Chief Executive Officer of the Bermuda Monetary Authority has said that an "extremely busy year" lies ahead for the regulator as it develops a "risk-based regulatory and supervisory environment that fits the unique nature of Bermuda's market" following the territory's decision not to apply the Solvency II capital adequacy framework to the captive insurance sector.

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